Are multi-year software subscriptions for schools value for money?

 

Are software subscriptions value for money?
Software subscriptions – value for money?

Over the years the software industry has undergone transformational change arising from new technology which has led to:

  • Enhanced software functionality
  • Reduced infrastructure costs for users e.g. via cloud delivery
  • Integrated in-office and mobile solutions

These technology changes are complemented by greater flexibility in how software is licensed. The earlier dominance of perpetual licensing has in many sectors given way to subscription based licensing. Subscription licensing is typically offered on a per user or per site basis and depending upon the application terms range from a month to a year with renewal reminders being issued in advance enabling subscribers to cancel if needed.

Subscription licensing enables a software vendor to adopt a more granular approach to licensing. It enables users to subscribe for the functionality they actually intend to use and benefit from rather than having to license an entire package while only using a limited set of functions.

This approach also allows users to start by only licensing the functionality initially required and then expand into other functions at a later date. Given the tremendous variety of need, experience and resources across schools this is an important ability – why should a school incur costs before it needs to? This flexibility provides value for money as licence expenditure is tied more closely with usage.

Multi-year Deals

Sometimes subscription licenses are bundled into multi-year deals for individual schools, federations or multi-academy trusts in exchange for a nominal discount for advance payment. While beneficial to the vendor this type of arrangement is only value for money if a school is operating in a stable and secure environment and the licence provides the flexibility to cope with future changes.

For example, the following could impact upon on your licence:

  • The school’s approach to managing data changes e.g. a school joins a multi-academy trust
  • Maintenance contract changes lead to a different approach to managing data e.g. a new contractor assumes responsibility for data management
  • Senior leadership changes lead to a re-think in systems which support a school

In the above examples can your licence (and any pre-paid subscription!) be novated or transferred without incurring additional charges or penalties?

You also need to be confident that in a long-term, multi-year contract the existing provider will continue to represent excellent value for money. Who can predict what impact future commercial and technological innovations will have in a market? If you want to change provider mid-way through a multi-year subscription in all likelihood the pre-paid license fees are not fully refundable.

As for Altuity – we offer subscriptions which typically renew on a three-month to one year cycle on a pay-by-use basis so that you license the functionality you’re going to be using.  In addition for smaller organisations such as primary schools, who may be using manual or spreadsheet processes, we’re introducing licensing calculated on data usage. This provides an entry-level licensing option tied to usage and not the number of users or pupils which in the past has excluded smaller schools from being able to take advantage of commercially supported and maintained software.

In summary, a headline discount offered as an incentive to commit to a multi-year deal will not always represent long-term value for money. The flexibility offered by shorter terms and different models based on the number of schools (e.g. in a multi-academy trust), users or data usage enables schools to license software according to their needs in a future-proofed way. These options are offered with Altuity’s AltoSites asset and maintenance system.